UK: Meltdown For Meltwater? The Supreme Court’s Judgment

Last Updated: 15 May 2013
Article by Adam Edwards

The application of copyright law to the technical processes involved in viewing copyright material on the internet1. Is it an infringement merely to view copyright material when browsing the internet?

Introduction

The owner of a copyright has the exclusive right to do or to authorise a number of acts2. Broadly speaking, it is an infringement to make or distribute copies or adaptations of a protected work. Merely viewing or reading a protected work is not an infringement. 

It is a fundamental and important question affecting millions of EU citizens whether browsing the internet and viewing copyright material 'on screen' are infringements unless licensed by the copyright owner. The ordinary use of the internet will involve the creation of temporary copies  at  several  stages:  internet  routers;  proxy  servers;  the  internet  "cache"  on  the computer hard disk; and the screen copy itself. The Supreme Court found that the key point is that in none of these cases does the end-user set out to make a copy of the web-page unless he chooses to download it or print it out. His object is to view the material. The copies temporarily retained on the screen or in the internet cache are merely the incidental consequence of his use of a computer to do that. 

Background

The Relevant EU Law
The EU has been concerned since the mid 1990s to balance on the one hand its policy that copyright holders should be afforded a high level of protection for intellectual property rights, and on the other the concern that the over-rigid application of copyright law devised for physical media of transmission or storage (e.g. books, film, records, CDs and other copyright works)  would  retard  the commercial development  of  the  internet  and  other  forms  of electronic media technology (e.g. satellite decoders and television screens).

Various member states had, under the Berne Convention 3, legislated in different ways for the treatment of copyright works made available in digital form and these differences were seen as being liable to impede the development of the internal market. The purpose of what became Directive 2001/29/EC4 (the "Directive") was to harmonise the rules across the EU.

The Meltwater Case
The appellant is a professional association of public relations professionals who, among other things, monitor news coverage on behalf of clients and either send them a monitoring report by email or enable the customer to access it on the Meltwater website. Meltwater holds a licence from the publishers of the newspapers to provide their services and it wascommon ground that Meltwater's customers require a licence to receive the service in its present form, being by email. The email copy is not temporary. It is stored on the recipient'shard drive until the end user chooses to delete it.

The question for the appeal was whether Meltwater's customers would need a licence to receive  the  services  if  the  monitoring report  were  made  available  only  on  Meltwater's website. To the extent that the customer downloads the report from the website, he is making a copy that will infringe the newspaper's copyright unless he is licensed. But what if he merely views the material on the website? Proudman J held at first instance that the customer also needed a license for that, and the Court of Appeal agreed with her.

The Directive

Recital 33 of the Directive specifically states that, subject to certain conditions, acts involving the production of temporary copies should be lawful so as to enable internet browsing. Chapter II of the Directive deals with "Rights and Exceptions". Articles 2, 3 and 4 set out the rights of copyright owners and article 5 then qualifies those rights. Article 5.1 creates an exception for temporary copies ("article 5.1").

The Case Law of the Court of Justice (CJEU)

There are three main CJEU cases to which the Supreme Court referred: Infopaq I5; The Premier League Case6; and Infopaq II7. Proudman J and the Court of Appeal only had the benefit of Infopaq I. Lord Sumption's judgment examines these three cases in some detail. Infopaq I sets out the five conditions (the "Conditions") which must be met to comply with the article 5.1 exception for "an act of reproduction": "the act is temporary; it is transient or incidental; it is an integral and essential part of the technological process; the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary of a lawful use of a work or protected subject-matter; and the act has no independent economic significance."  These conditions have to be read together so as to achieve the combined purpose of all of them.

The Supreme Court's ruling on the effect of the CJEU decisions

(1) The article 5.1 exception applies to copies made as an integral and necessary part of a "technological process", and the making of copies is a "necessary" part if it enables it to function "correctly and efficiently". (2) The copies must be temporary – (i) the storage and deletion  of  copyright  material  must  be  automatic  (not  dependent  on  some  further discretionary human intervention) and (ii) the duration of the copy should be limited to what is necessary to the completion of the relevant technological process. (3) The exception applies to lawful uses, including internet browsing. (4) For the purpose of article 5.1 a use of the material is lawful if it is consistent with EU legislation governing the reproduction right, including article 5.1 itself. (5) The making of the temporary copy must have no "independent economic significance", being simply no independent commercial value.

Application to the Meltwater case

The Supreme Court found that "once it is accepted that part of the purpose of article 5.1 is to authorise the making of copies to enable the end-user to view copyright material on the internet  ...  it  must,  if  the  exception  is  to  be  coherent,  apply to  the  ordinary technical processes associated with internet browsing." Conditions 3, 4 and 5 were all held to apply with no room for argument. Further, the Supreme Court found that the copies made in the internet cache or on screen are "transient". Software puts a web-page on screen and into the cache for the purpose of enabling a lawful use of the copyright material, i.e. viewing it. The creation of the copies is only incidental to the technological process involved, such that Conditions 1 and 2 are also fulfilled.

The respondent argued that if the viewing of copyright material on a web-page did not require a licence, the owner would be exposed to large-scale piracy. The Supreme Court was not persuaded and stated that all that article 5.1 achieves is to treat the viewing of copyright material on the internet in the same way as its viewing in physical form. It was pointed out that nothing in article 5 impairs the copyright owner's right to proceed against  those  who  unlawfully  upload  copyright  material  onto  the  internet,  just  as  the copyright owner has always been entitled to proceed against those who make or distribute pirated copies of books, films, music or other protected works.

Having found that article 5.1 extends in principle to temporary copies made for the purpose of browsing by an unlicensed end-user, the Supreme Court found that much of the argument which the courts below had accepted, "unravels".

Reference to the CJEU
To put the matter beyond doubt the Supreme Court found that, before making any order on the appeal, recognising the transnational dimension and that the application of copyright law to internet use has important implications for many millions of people across the EU, it should refer to the CJEU the question of whether the fact that a user can determine when to end his browsing session or to delete his internet cache, complies with the requirement of article 5.1 that acts of reproduction should be (i) temporary, (ii) transient or incidental and (iii) an integral and essential part of the technological process.

Conclusion

Meltwater look as though they will be victorious at the final hurdle, though Lord Sumption commented that perhaps Meltwater's licence fee needed to be increased significantly in view of the value of the rights for which Meltwater is licensed. Subject to the outcome of the reference, the Supreme Court has taken the opportunity to make it clear that the viewing of material from the internet on a computer is as lawful as if it were being viewed in physical form.  

Footnotes

1. Public Relations Consultants Association Ltd (Appellant) v The Newspaper Licensing Agency Ltd and others (Respondents) before Lord Neuberger, President, Lord Kerr, Lord Clarke, Lord Sumption and Lord Carnwath. Judgment given 17 April 2013 [2013] UKSC 182 

2. Sections 16 to 26 of the Copyright, Designs and Patents Act 1988 (the "CDPA")

3. Article 9(2) of the Berne Convention for the Protection of Literary and Artistic Works

4. Section 28A of the CDPA was added by regulation in 2003 to give effect to the Directive 

5. Infopaq I [2010] FSR 20

6. Football Association Premier League Ltd v QC Leisure and Karen Murphy v Media Protection Services Ltd [2012] 1 CMLR 29

7. Infopaq II – a second reference of Infopaq I

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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